March 7, 2008
Target Short on Target
You’ll recall back in the glorious days of free trading ideas at the end of February, the Box came up with 15 or so short ideas in a row just before the market started its current leg down. One of those ideas was to short Target (TGT), and it was a “preferred idea” which means the weekly trend was in the same direction as the set-up (down), so I thought I’d review it.
(Incidentally the Retail HOLDR, also a preferred short idea for February 28, has already fallen below its Target 1.1 — trail that stop!)
It still has a ways to fall to the Target (ha!) Zone, but since it has already covered one times initial risk, following the ABC Stop Method, we can move the initial protective stop down to our entry price to assure a breakeven trade at worst.
(Interestingly, the Box came up with a long idea in the XRT (Retail SPDR) in early March, but of course that set-up wasn’t in line with the weekly trend and wasn’t “preferred.”)
March 7th, 2008 at 11:45 pm
For those of us doing the “Box” trades in our IRA’s where we can’t short, do you think using just the long ideas will give us bad returns? Is the Box only good when you take both Long and Short ideas?
Is there a way to go back to prior “Long” Box ideas and see what the performance results are for just those in aggregate?
Thank you
March 8th, 2008 at 8:12 am
Lawrence: Do you have the spreadsheets for December and January? I’ll (re-)send them to you now. I think if you can’t trade from both the short and the long side, then the returns will very likely suffer in this environment (a bear market).